Reliance Power Ltd., a key player in India’s power generation and distribution sector, has been making headlines in 2025 with its stock price hitting fresh 52-week highs and delivering multibagger returns over the past few years. Led by Anil Ambani, the company has staged a remarkable recovery from its struggles during the COVID-19 period, with its share price soaring by over 4,000% from its lows. As of June 10, 2025, the stock is trading at approximately ₹71.35, reflecting a 10% surge in a single trading session and a staggering 185.6% gain over the past year. This article delves into the factors driving Reliance Power’s stock rally, its financial performance, market sentiment, and what lies ahead for investors.
Recent Share Price Performance
Reliance Power’s stock has been on a meteoric rise in 2025, consistently hitting new 52-week highs. On June 10, 2025, the stock surged over 10% to reach ₹71.35 on the Bombay Stock Exchange (BSE), marking its highest level in over a decade. This follows a 4.8% rally earlier in the day, which saw the stock touch ₹67.68, and a 9% jump to ₹70.2 as reported by Equitymaster. Over the past month, the stock has gained 76%, and in the last year, it has climbed 173%, significantly outpacing the BSE Power Index, which declined by 7.8% over the same period.
The stock’s performance over longer timeframes is equally impressive. From ₹24.6 a year ago, it has risen to ₹71.35, delivering a 185.6% return. Over five years, Reliance Power has provided multibagger returns of approximately 2,400%, transforming it into one of the standout performers in the Indian stock market. Posts on X reflect this enthusiasm, with users like @BhartiyNiveshak celebrating the stock’s “crazy” run and @spselvablogg projecting a potential target of ₹110 if the momentum continues.
Key Drivers of the Rally
Several factors have contributed to Reliance Power’s remarkable stock price surge in 2025. These include strategic project wins, financial restructuring, favorable court rulings, and a return to profitability, all of which have bolstered investor confidence.
1. Project Wins and Renewable Energy Focus
Reliance Power has made significant strides in the renewable energy sector, aligning with India’s push for clean energy. Its subsidiary, Reliance NU Energies, secured a 350 MW solar power project with a 175 MW/700 MWh Battery Energy Storage System (BESS) from SJVN, as well as major solar-BESS projects that have attracted investor attention. Additionally, the company announced a ₹2,000 crore solar project partnership in Bhutan, further expanding its renewable energy portfolio.
These projects signal Reliance Power’s shift from traditional thermal energy to sustainable energy solutions, a move that resonates with global and domestic investors. The Economic Times noted that these project wins have been a key driver of the stock’s 76% gain over the past month, as they position Reliance Power as a significant player in India’s renewable energy landscape.
2. Debt Reduction and Financial Stability
A major factor behind the stock’s rally is Reliance Power’s aggressive debt reduction strategy. Over the past year, the company repaid ₹5,338 crore, significantly improving its debt-to-equity ratio from 1.61 in FY24 to 0.88 in FY25. A notable repayment included $150 million (approximately ₹1,285 crore) by its subsidiary, Sasan Power Limited, to IIFCL (UK) at the end of 2024. This has enhanced the company’s financial stability, making it more attractive to investors.
The Financial Express highlighted that this focus on reducing debt has been a critical reason for the stock’s 63% surge in 2025, as it alleviates concerns about the company’s financial health that plagued it in previous years.
3. Equity Infusion and Capital Raising
In May 2025, Reliance Power raised ₹348.15 crore through the placement of preferential shares, issuing 9.55 crore equity shares to promoter Reliance Infrastructure and 1 crore shares to Basera Home Finance Private Limited. This capital infusion has strengthened the company’s balance sheet and provided funds for future growth initiatives. The Economic Times reported that this move, combined with project wins, has fueled the stock’s rally.
4. Return to Profitability
Reliance Power’s financial performance in the January-March quarter of FY25 (Q4 FY25) marked a significant turnaround. The company reported a consolidated net profit of ₹126 crore, compared to a loss of ₹397.56 crore in the same quarter of the previous year. This was attributed to reduced expenses, despite a slight decline in total revenue from ₹2,193.85 crore to ₹2,066 crore. The return to profitability has been a key catalyst for the stock’s upward momentum, as noted by Live Mint.
However, the company’s full-year performance for FY24 was less encouraging, with a 553.9% decrease in net profit, resulting in a net loss of ₹22,422 million compared to a loss of ₹3,429 million in FY23. Despite this, revenue grew by 5% to ₹78,926 million, and the current price-to-earnings (P/E) ratio of 9.9 suggests the stock is trading at attractive levels, as per Trendlyne’s analysis.
5. Favorable Court Rulings
Reliance Power has benefited from favorable court rulings that have resolved longstanding legal disputes, further boosting investor confidence. While specific details of these rulings are not fully disclosed in available sources, The Economic Times mentioned them as a contributing factor to the stock’s rally, indicating that they have alleviated regulatory and financial uncertainties.
6. Market Sentiment and Speculative Interest
The stock’s performance has also been driven by speculative investor interest and market buzz, as noted by Live India. In comparison to its sector peer NTPC, which posted a negative return of -5.89% over the past year, Reliance Power’s resilient growth pattern has attracted significant attention. Posts on X, such as @business_mocker’s comment on the stock hitting a 52-week high of ₹63.39, reflect the bullish sentiment among retail investors, with some analysts eyeing a target of ₹72.
Comparative Analysis with Peers
Reliance Power’s performance stands out when compared to other players in the power sector. The BSE Power Index, which includes major companies like NTPC, Siemens, Adani Green Energy, and Thermax, declined by 7.8% over the past year, while Reliance Power gained 185.6%. NTPC, a key competitor, has struggled with negative returns, highlighting Reliance Power’s ability to outperform in a challenging sector.
Adani Power, another peer, has also seen strong gains, with its stock rising 12% over a five-day rally. However, Reliance Power’s focus on renewable energy and debt reduction gives it a unique edge, as it aligns with both market trends and government policies promoting clean energy. Suzlon Energy, a renewable energy competitor, has also performed well, but Reliance Power’s broader portfolio across thermal and renewable energy provides greater diversification, as noted by Telangana NavaNirmana Sena.
Financial Overview
Reliance Power’s financial metrics provide a mixed picture. While the company has shown improvement in its debt-to-equity ratio and quarterly profitability, its full-year performance in FY24 was impacted by significant losses. Key financial highlights include:
- Revenue (FY24): ₹78,926 million, up 5% from FY23.
- Net Profit (FY24): Loss of ₹22,422 million, compared to a loss of ₹3,429 million in FY23.
- Q4 FY25 Net Profit: ₹126 crore, compared to a loss of ₹397.56 crore in Q4 FY24.
- P/E Ratio: 9.9, indicating attractive valuation.
- Debt-to-Equity Ratio: Improved to 0.88 in FY25 from 1.61 in FY24.
The company’s current P/E ratio of 9.9, combined with a high valuation score from Trendlyne, suggests that the stock is trading in a “P/E Strong Buy Zone,” making it appealing to value investors.
Market Sentiment and Analyst Outlook
Market sentiment toward Reliance Power is overwhelmingly positive, driven by its recent performance and strategic initiatives. Posts on X reflect this optimism, with users like @sumitkbehal emphasizing the stock’s 4,000% rise from COVID lows as a lesson in investing in quality companies. However, analysts remain cautiously optimistic, citing potential risks such as overbought conditions and market volatility.
Riyank Arora, a technical analyst at Mehta Equities, noted signs of profit booking after the recent rally, with major resistance at ₹65. Bhosale, another analyst, suggested that while the stock could extend its upmove, dips to ₹56-57 would be ideal entry points for long positions, with ₹72 as a potential resistance level. These insights from Live Mint highlight the need for investors to balance enthusiasm with caution.
Risks and Challenges
Despite its strong performance, Reliance Power faces several risks that investors should consider:
- Market Volatility: The stock’s rapid rise has led to overbought conditions, increasing the likelihood of profit booking and price corrections.
- Regulatory Risks: Changes in government policies or subsidies for renewable energy could impact profitability, as noted by Telangana NavaNirmana Sena.
- Competition: The renewable energy sector is highly competitive, with global and domestic players vying for market share.
- Historical Financial Challenges: The company’s significant losses in FY24 underscore the need for sustained profitability to maintain investor confidence.
- Low Promoter Holding: A relatively low promoter stake could raise concerns about alignment between management and shareholders.
Reliance Power’s share price surge in 2025 is a testament to its strategic transformation and resilience in a competitive sector. With a 185.6% gain over the past year and a 2,400% return over five years, the stock has delivered exceptional value to investors. Key drivers, including project wins, debt reduction, equity infusion, and a return to profitability, have fueled this rally, while favorable court rulings and market buzz have added to the momentum.
However, investors must weigh the opportunities against risks such as market volatility, regulatory challenges, and historical financial struggles. As Reliance Power continues to expand its renewable energy portfolio and strengthen its financial position, it remains a compelling option for those seeking exposure to India’s power sector. For now, the stock’s “crazy” run, as described on X, shows no signs of slowing down, but prudent investment decisions will require careful monitoring of market trends and company developments.
Last Updated on: Saturday, June 14, 2025 1:43 pm by Ventrapati Mahitha | Published by: Ventrapati Mahitha on Tuesday, June 10, 2025 11:10 pm | News Categories: News
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